2011 IPP list shorter than usual

MANILA, Philippines - The 2011 Investments Priorities Plan (IPP) will have a smaller listing in terms of fiscal incentives as the government continues to look for ways to increase tax collection, the Board of Investments (BOI) said.

In a press conference, BOI Executive Director Efren Leano said that the 2011 IPP will have a smaller list of inclusions for next year.

“That is the directive of the Secretary (Gregory L. Domingo) that incentives will be given to those who need it only,” Leano said.

Leano said they will be calling a meeting of all concerned government agencies to ask what specific sectors need tax perks in order to encourage investments. He said the meetings will begin next month.

“We want to consult all of them so that when we finally come up with the IPP we will not receive any complaints that we did not give incentives to a sector that needed it,” Leano explained.

With regards to cement, Leano said the Cement Manufacturers Association of the Philippines (CEMAP) is continuously lobbying for the removal of tax perks for clinker alone. He said CEMAP has cried foul over the decision of the government to give incentives to clinkers because of the magnitude of investments for the few cement firms in the country.

However, Leano said that the BOI maintains their position that clinker deserves incentives. “We maintain our position unless CEMAP can prove that giving incentives for clinkers is bad for both the industry and the consumers.”

Earlier, Domingo said that investment incentives on industries that attract many businesses will be removed in order to make way for a more robust revenue collection by the government. He said the incentives on industries that receive sizeable investments must be removed already. He said that if investors will come in anyway, then there is no need to provide tax breaks.

“The incentives should be rationalized. Incentives should not be given to just any industries you want to give incentives to industries where you think we cannot get those industries without those incentives but if those industries as coming in anyway or setting up shop then why do you have to give incentives,” Domingo asked.

Domingo did not name which industries will retain the incentives program. He said they will have to study the current incentive package.

At the same time, Domingo said there is a need to give the BOI more leeway in terms of giving incentives for special circumstances. He said that especially when the Philippines is competing against another country for a big investment, the BOI must be given powers to help make the Philippines more attractive. Of course he said there should be restrictions and safe guards so that the authority will not be abused.